• Trump blasted
automakers like Ford during the presidential campaign.

• Ford and GM's CEO joined his advisory councils anyway
and logged an early win as a result.

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• But toxic politics are undermining any deals that would
work for corporate America so they cut their losses.

A few months after Donald Trump was elected President, I made the
rounds at the Detroit auto show in January and tried to get a
sense of what the car business thought of the new Chief
Executive.

After all, Trump had - during the campaign - very publicly taken
Ford to task for plans to send auto production to Mexico. And as
he took office, the idea of a "border adjustment tax" that
would've hit manufacturers of all sorts was on the rise.
But the US auto industry seemed pretty happy to have Trump in the
White House, for two key reasons:

First, Detroit expected Trump's new Environmental
Protection Agency to reopen a review of mileage and emissions
benchmarks - Corporate Average Fuel
Economy, or CAFE, standards - which had been locked in during
the last days of the Obama administration. Taking the lead on
this, in fact, was the Ford CEO Mark Fields, who pressed Trump to
give the carmakers the opportunity to revisit the standards in
light of strong SUV and pickup sales. (Fields has since left
Ford.)

Second, Detroit wanted a corporate tax cut. And Detroit
wasn't alone. All of corporate America wanted a corporate tax
cut. That was where the real glee over Trump was coming from.

Trump might have expected some investment and hiring in states
critical to his re-election to follow. That hasn't really come to
pass, and for good reason: the carmakers don't want to add more
bulk ahead of an impending sales downturn.

So the deal score at this point could effectively be
Detroit: 1, Trump: 0.
But, that also might've been a misread. And
Detroit's experience with Trump is instructive in understanding
why people were on this panel in the first place, why they
stayed, and then why they left so fast.

No more deals

caption

Trump hosts a strategy and policy forum with CEOs at the the White House in Washington.

source

Thomson Reuters

There was only one auto-industry executive left on Trump two
panels of business leaders - the Strategic & Policy Forum
and Manufacturing Council - by the time the President took
to a podium Tuesday and wound up offering a defense of the white
supremacists who had marched in Charlottesville, Virginia over
the weekend.
That was Mary Barra, who runs General Motors. (Fields left the
manufacturing council after losing his post as CEO of Ford, and
Tesla founder Elon Musk resigned after Trump said he'd withdraw
from the the Paris Climate
Change Agreement.)
She wasn't alone, of course. Even after Merck's CEO Kenneth
Frazier bolted early Monday - citing his personal responsibility
to stand up to intolerance - leading to a small exodus, many
other executives seemed prepared to stay on.

Perhaps, the groups held out hope that a big tax cut was
still in the cards. Certainly, they might have seen how Trump
angrily reacted to Frazier and decided it wasn't worth having to
deal with that. One, unnamed CEO told the New York Times's Andrew
Ross Sorkin as much.
So what changed? Sure, Trump's infamous Tuesday press conference
was a trigger.
Ultimately, though, it seems to have dawned on the CEOs that the
concessions they might get out of Trump weren't worth the vast
reputational damage that even a peripheral association with the
defense of white supremacists would bring.
And Detroit's small victory also made it clear that gains to be
had aren't so great anyway. American consumers want to buy SUVs
and pickups for sure - but they also want good fuel economy in
those vehicles.
So maybe the score is really Detroit: 0.5, Trump: 0.

What happens when business can't take it anymore

caption

No more deals for you.

source

Drew Angerer/Getty Images

I wouldn't say Trump had an inexhaustible level of support
from CEOs who had been running vastly greater enterprises than
the Trump Organization, but if the mood in Detroit was any
indication, he was going to get a few passes for bad behavior. He
just wasn't going to get any for appalling, self-destructive
conduct.
What they certainly didn't want was to wind up with a score that
looked more like - Detroit: -1, Trump: 0 - just
because she stuck around.

Contemporary business leaders tend to be careful, pragmatic,
diplomatic people who exercise a lot of patience with Washington.
They want to thrive no matter which party is in power.

Trump won in November in part because some voters saw him as a
business-guy billionaire who flew around in his own plane and
lived in a tower with his name on it in New York City. He wasn't
a cerebral former con-law professor and therefore he would use
his combative business skills to cut a whole bunch of beautiful
deals and would further lower the already low unemployment rate
and bring greater prosperity to the land.

There is no long game that involves neo-Nazis

caption

American business doesn't want to do business with the KKK.

source

REUTERS/Jonathan Ernst

Anybody who had seen Trump do his thing in New York for decades
understood that this was a con job, but with a GOP-controlled
Congress and a longstanding desire among companies to see the US
corporate tax rate dropped, it wasn't hard to look past the
theatrics and play the long game.

I personally thought the tax corporate tax cut would happen
almost immediately. In America, cutting taxes always wins and
this one would be straightforward. You could even imagine
Democrats getting behind it.

Naturally, as Trump's relationship with the business world has
completely melted down over the past few days, I reflected on
what he had achieved eight months ago, before his comments about
the Charlottesville crisis.

He had the CEOs on board. They were wary, and they knew full well
that they could come in for some routine Trumpian Twitter abuse,
but they went to Washington and they sat around tables for photo
ops. And they were even willing to give him some headlines about
factory openings and job creation as long as he didn't do
anything more repellent than the repellent things he had already
done.